Updated Nov 1, 2021 - Business

Twin Cities acupuncture clinic faces wage theft suit

Illustration of a pattern of gavels.

Illustration: Brendan Lynch/Axios

A Twin Cities acupuncture clinic with ties to a school whose massage program was shuttered by the state is facing questions about some of its practices, Axios has learned.

What's happening: A class action suit filed in April against the American Academy of Acupuncture and Oriental Medicine (AAAOM) and its owners alleges that they engaged in an "illegal, intentional, and systematic scheme" to steal wages from its acupuncturists.

  • The federal complaint, which hasn't been previously reported, claims the defendants didn't pay overtime or provide meal breaks, and illegally withheld 5% of employees' wages.
  • Three named plaintiffs, who either currently work at the clinic or once did, are seeking unspecified damages on behalf of all impacted employees.

Context: Minnesota's Office of Higher Education shuttered AAAOM's Chinese-language massage program and ordered the former owner, Changzhen Gong — who is still an owner of the acupuncture clinic — to relinquish control of the school in 2020.

  • The regulatory agency cited a number of administrative issues, including incomplete or inconsistent student records and a "failure to evaluate and approve" internship sites and supervisors.
  • The school has since reopened without its former massage program under new ownership as the American Academy of Health and Wellness. The change of ownership transition was finalized in April 2021, according to the state Office of Higher Education.

What they're saying: The defendants denied the allegations in a legal filing.

  • Gong disputed the allegations via correspondence and told Axios that the plaintiffs have not produced evidence of their claims and are being paid at an agreed-upon rate.

Zoom out: AAAOM was featured in a recent report from the nonprofit Seldin/Haring-Smith Foundation that raises concerns about sex trafficking in state-authorized schools across the nation. The researchers behind the case study pointed out failures in oversight and enforcement related to the issue.

  • The report, highlighted in a USA Today investigation, has caught the eye of federal regulators and lawmakers.
  • The U.S. Department of Education sent a letter in August to the accrediting agency that renewed AAAOM's certification in 2018, seeking more information about that vetting process and approval of the change in ownership.
  • The U.S. House Oversight and Reform Committee is also calling for more action to address sex trafficking in trade schools.

Of note: A former school official told the 19th News that the program may have been "unfairly targeted."

  • Gong told Axios he is "currently exploring avenues ... [for] obtaining a retraction" of the state Office of Higher Education's allegations.

Editor’s note: This story has been updated with a response from Changzhen Gong. We also removed a comment from the plaintiffs' attorney and references to successors, and clarified the details surrounding OHE's closing of the massage program.


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